Construction sector to submit draft Apartment Law to parliament

The Myanmar Licensed Contractor Association (MLCA) has drafted a proposed Apartment Law to address a regulatory gap in the property sector. Its aim is to generate more demand and create a market for apartments in Myanmar.

The MLCA’s Apartment Law seeks to regulate apartment buildings developed on land areas of less than 20,000 sq ft. At the moment, only buildings developed on land spanning 20,000 sq ft and above are defined as condominiums and therefore regulated by the 2016 Condominium Law.

“The draft Apartment Law is now under discussion and in the process of being submitted to the Pyithu Hluttaw. If it is passed, it will be beneficial both to residents and contractors,” said U Zaw Win, a patron of the MLCA.

The Apartment Law, which was drafted with the help of former government officials and professional lawyers, provides recourse for apartment owners in the event of contract disagreements with buyers.

Currently, the buying and selling of apartments is conducted based on a system of trust, with no legal recourse or guarantee in the event of fraud or the contract falling through. As such, it is difficult to establish the actual ownership of an apartment. In today’s market, apartments are usually sold for between K150 lakh and K300 lakh.

“In Myanmar, land can be registered for sale and also mortgaged or used as collateral. But there is no such process for apartments and ownership is not credible” said Dr Zaw Win.

Under the proposed law, owners can make the sales contract official by submitting the documents with a registration office. Importantly, this will also help in the mortgage and tax collection process.

“The Apartment Law will be more relevant and inclusive of the entire property industry compared to the Condominium Law, which has many limitations,” said U Tin Maung Win, chair of the Transport, Communication & Construction Committee, under the Pyithu Hluttaw.

If enacted, MLCA members hope the new Apartment Law will help generate a more stable and credible apartment market with potential for growth.

It would also help to support struggling contractors which have come under pressure from rising costs as a result of the depreciating value of the kyat. “Most construction materials are imported and things are becoming more expensive now that the dollar is rising versus the kyat,” said “ U Kyaw Win, chair of Shwe Than Lwin Company and MLCA.

If the Apartment Law is enacted, this will help to generate more demand for apartments and establish a functional market for such properties. It will also result in more new buildings being developed, he added.

Last August, contractors had submitted a list of challenges the industry faces, including rising construction costs, difficulties working with the banks and a shortage of skilled labour. Currently, there are almost 2000 contractors in Yangon’s construction sector.

Source: Myanmar Times

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